Origin of the reportDuring the fall’04 semester of BBA program of North South University, we were required to do a term project in the course MKT202. This course is designed to give the business students an understanding of principles of marketing that is necessary to understand the basic marketing concepts applied by companies. Out of several options of the term project topics, we have chosen a company ‘Nestlé Bangladesh Ltd.’ for our term project.Objective of the reportTo prepare and submit the term project within specified time.

To have a very practical idea and over viewing the marketing sector focusing on a specific company and their performance in Bangladesh.

Present company’s current mission, vision, objectives, and goals.

Find out their strength, weakness, opportunities, threats.

Defining their market segmentation, target market and product positioning and key marketing areas.Source of information

The report is originated from both primary and secondary data source.Primary data:

Face to face conversations with employees.

By arranging appointment with top officials of the company.Secondary data:

Company’s reports and other published materials

Various marketing books specially our text bookScope and Limitation

There was great difficulty of finding appointment of the top officials of Nestlé

Although talking to the officials interviewing few personnel of top management and talking to personal references was helpful, still we could not cover in depth analysis on the above mentioned topic.

Getting relevant papers, documents, information were strictly prohibited.

The officers were hesitant to reveal the information in regard of confidentiality

Unavailability of financial data as Nestlé does not publish financial report to the public

Restriction on time and resources of data due to absence of corporate website in BangladeshBackground of the company

Nestlé – the world’s largest food group, not only in terms of its sales but also in terms of its product range and its geographical presence: Nestlé covers nearly every field of nutrition: infant formula, milk products, chocolate and confectionery, instant coffee, ice-cream, culinary products, frozen ready-made meals, mineral water etc. We are also a major producer of pet food. In most of these product groups and in most markets, Nestlé is the leader or at least a strong number two. We are a very focused company, with more than 94 percent of the sales coming from the food and beverage sector. Nestlé is present around the globe, on all continents, with around 230,000 people working in more in an 84 countries with 466 factories and with sales representatives in at least another 70 countries. Many of its brand names are familiar to us: Nescafé, Nido, Maggi, Polo, Smarties, Milo, Perrier, Friskies, KitKat, Crunch….Some of its products have broken records: 3,000 cups of Nescafé are consumed every second. And KitKat merited an entry in the Guinness Book of World Records as the world’s best-selling chocolate bar with 418 KitKat fingers eaten every second around the world!

Nestlé with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestlé and is today the world’s biggest food and beverage company. Sales at the end of 2003 were CHF 88 bn, with a net profit of CHF 6.2 bn. They employ around 253,000 people and have factories or operations in almost every country in the world.[1]

Company profile of Nestlé Bangladesh Ltd.Nestlé Bangladesh Limited started its first commercial production in Bangladesh in 1994; in 1998 Nestlé S.A. took over the remaining 40% share from Nestlé’s local partner when Nestlé Bangladesh became a fully owned subsidiary of Nestlé S.A. The managing Director of Nestlé Bangladesh Ltd. is Mr. Aldo Siegrist.

The Company’s strategy is guided by several fundamental principles. Nestlé’s existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential is never sacrificed for short-term performance. The Company’s priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives.[2]

Nestlé Bangladesh’s vision is to be recognized as the most successful food and drink company in Bangladesh, generating sustainable, profitable growth and continuously improving results to the benefits of the shareholders and employees.

The corporate head office of Nestlé Bangladesh Ltd. is situated in one of the finest locales of Bangladesh, Gulshan. The address is the following:Nestle Bangladesh Ltd.

Gulshan Tower (4th Floor),

Gulshan Avenue, Dhaka-1212

Tel: 02-9882759-65

Fax: 02-8822035

Its factory is situated at Sripur, which is 55 km north of Dhaka. The factory produces instant noodles, cereals and repacked milks, soups, beverages and infant nutrition products.

Today Nestlé Bangladesh Ltd. is a strongly positioned organization. With their policy Nestlé is confident that it will continue to grow in terms of integrated development, concentrating on their core competencies and their commitment to high quality. Nestlé also aims of providing the best quality foods to the people of Bangladesh.

Business Principles

Since Henri Nestlé developed the first milk food for infants in 1867, and saved the life of a neighbor’s child, the Nestlé Company has aimed to build a business based on sound human values and principles.

While Nestlé Corporate Business Principles will continue to evolve and adapt to a changing world, its basic foundation is unchanged from the time of the origins of the Company, and reflects the basic ideas of fairness, honesty, and a general concern for people.

Nestlé is committed to the following Business Principles in all countries, taking into account local legislation, cultural and religious practices:

•           Nestlé’s business objective is to manufacture and market the Company’s products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners.

•           Nestlé does not favor short-term profit at the expense of successful long-term business development.

•           Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust and that without its consumers the Company would not exist.

•           Nestlé believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization.

•           Nestlé is conscious of the fact that the success of a corporation is a reflection of the professionalism, conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucial.

•           Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each of its markets.[3]

Objective

Nestlé’s business objective at all levels is to manufacture and the market the company’s product in such a way as to create customer life time value so that it can be sustained over the long term for shareholders, employees, consumers, business partners, and the large number of national economies in which Nestlé operates.Achievements

Nestlé Bangladesh Limited has succeeded immensely in establishing itself as a high quality food industry in Bangladesh. As suggested by Hasan Mehdi, the marketing officer of Nestlé following are the prime achievements:

First to launch high quality infant nutrition products in Bangladesh.

First to produce instant noodles under local manufacturing in Bangladesh.Nestlé firmly emphasizes on real internal growth and it is growing from year to year. Nestle is also proud of the fact that its growth of sales is sustainable, is increasing always. It measures its achievements in terms of its mass profit and acquiring equity in the market. Its main purpose is customer acknowledgement, the fact that consumers realize that nestle is all about “quality”. The growth of sales had never degraded for Nestlé.KEY SUCCESS FACTORS

- Strong brands / relationships with consumers

- Research and development

- Innovation and renovation

- Product availability

- Building relations with medical and scientific communityIn light of Nestlé Bangladesh Ltd., we have tried to analyze the following components of marketing strategy through different theories and applications:

External factors

Social

Nestlé makes an effort to integrate itself as much as possible into the cultural and social values of the different countries. During operation in Bangladesh Nestlé has launched two products which explains how Nestlé values social and cultural factors, Recently Nestlé Bangladesh has launched “Halim Mix” which was meant to be distributed only in Bangladesh. Another example being “Maggi Noodles” itself. It has a very big market both in Malaysia and Bangladesh but the one distributed in Bangladesh has an added taste that is, it is spicier than the one in Malaysia. This has been done to match the taste buds of Bangladeshi consumers.

Ethical

Although Nestlé faces ethical dilemmas in commercialization of its products, it does not consider its high price to be an ethical crisis. This is because they are not ready to compromise their quality in order to make their product widely available to all.

Internal factors

Marketing structure: Marketing strategy

Nestlé is more people, product and brand oriented than system oriented. Nestlé favors long-term successful business development and even to grater extent, customer life-time value. At the same time Nestlé does not loose sight of the necessity to improve in terms of quality, price and distribution. However, Nestlé remain conscious of satisfying the wants needs and demands of its consumers. It is also aware of the need to generate a sound profit annually.

Nestlé seeks to earn consumer’s confidence, loyalty and preference and anticipate their demands through innovation and renovations. Therefore Nestlé is driven by an acute sense of performance adhering to quality and customer satisfaction.

Nestlé is as decentralized as possible within its marketing strategic definitions requiring increasing flexibility. Nestlé is always committed to the concept of continuous improvement of its activities and customer satisfaction through market segmentation, positioning and target marketing.

The effective formulation of their marketing strategy depends on the proper match between the three key elements:

ConsumerQualityCompetitionOne thing to be mentioned is that the match between consumer and quality is most important for Nestlé. Besides there are some other concerns that effect the marketing strategy. This concerns are where to compete, how to compete and when to compete.

The current marketing strategy of the company is based on the foundation of the four pillar strategy which has the following factors:

Market segmentation

Nestlé is targeted towards the consumer market. So Nestlé food products can be treated as consumer products. The major factors which play key role in the process of consumer segmentation are:

I.      Demographic (age, income, etc.)II.      Consumption patternIII.      Social economic factorsIV.      Brand loyalty pattersV.      Perceptual factorsVI.      Cultural factorsProper consideration of the given factors results in effective consumer segmentation for Nestlé. Since the product range is expensive in Bangladesh; Hasan Mehdi, the Marketing Officer, says, “………………………we have to concentrate strongly on income of consumers.”

Target market

Nestlé’s main focus is the socio-economic class, which is the company wide target. Nestlé’s potential consumers are those who acknowledge that Nestlé is all about quality and most importantly those who can afford the products. The strategy for selecting their target market is the following:

Income level (>10000 Tk)

Education

Quality realizationPositioning strategy

Nestlé’s positioning strategy comprises of the three steps:

Identifying the right competitive advantage

Choosing the right competitive advantage

Selecting the right completive advantage

The company then effectively communicates and delivers the chosen position to the market. Nestlé strongly believes that their products are specific and so are the product benefits. This, Hasan Mehdi, the marketing officer, termed as “Benefit Positioning”

Current Product Line

Nutrition Products

Cerelac

Lactogen

Good Start

Neslac, etc.

Performance Nutrition

Power Bar

Nutren

Neston, etc.

Culinary Products

Soups

Seasonings

Sauces

Maggi

Hot cup, etc.Coffee and Beverages

Nescafé

Nesquik

Milo, etc.Sugar and Chocolate Confectionary

Polo

Acti-V, etc.

KitKat

Quality Street

Milky Bar, etc.Milk Products

Nespray

Milkmaide

Coffeemate, etc.Regarding new upcoming products, Nestlé is looking forward to renovation and innovation for Maggi noodles and soups. This might be in terms of new flavors or improvising the quality and the quantity of the products.

Competition Structure

Nestlé supports free enterprise and therefore competes fairly and ethically and expects other company’s right to do so. The competition structure for Nestlé in Bangladesh is very limited whereas it faces bigger challenges in other countries such as India, china, etc. Still Nestlé tends to face competition in the food market. In terms of quality and product square is the biggest challenge and threat. Pran is the strong contender in terms of turnover. One strong upcoming challenge for Nestlé is BD Foods. When it comes to beverage and drinks Nestlé consider Ispahani and Coca-cola to be strong players. Although 70-80% consumers prefer Maggi noodles, Cocola seems to be catching up fast.

In terms of competitive advantage, quality seems to be the foremost tool for Nestlé. Although Nestlé tends to face criticisms in terms of price and number of products sold, in comparisons to local competitors, Nestlé intends to abide by their policy which never attempts to compromise quality.

Advertising and Promotional activities

The company focuses on its corporate image that “Nestlé is all about quality”. It hardly emphasizes on promotion and publicity because consumers in Bangladesh already know that ensuring product quality is what Nestlé focuses, not price.  Nestlé mainly focuses the two possible advertising objectives:

Informative advertising

Persuasive advertising

Since Nestlé is already an acknowledged and quality food product company in Bangladesh, it does not emphasize much on publicity and promotion. Here are a few points to ponder about advertising done by Nestlé Bangladesh Ltd.:

Nestlé cannot advertise for infant milk.

Mass advertising is done for new products only

Advertising and promotion is done by product wise

15% of marketing communication budget is spend for publicity

More indulged into product sampling and test marketing

Nestlé had performed test sampling in the year 2003 on Nescafé.

Nestlé Bangladesh Ltd. has specialized agencies for their promotional purposes. They are the following:

Product name Advertising agenciesNescafé UnitrendMilo (25%) UnitrendMaggi ProtishobdoPolo Protishobdo

Nestlé is associated with the following profiles of major media types:

Medium ResponsesNewspapers (e.g. Prothom Alo) Small Pass along audience, aprox 1 lakh. High cost per exposure.TV Reach up to 20 lakh audienceBillboards Very fewLocal Magazines NegligibleOutdoor -Internet N/A

The given table suggests that Cost per Contact is better in television advertisement than in newspapers and other media for Nestlé. Nestlé also believes that television receives better clutter, fleeting, exposure and a mass audience for promotion, which is only to be considered for Nestlé Bangladesh Ltd.

The main advertising is done on television and to a very little extent, newspapers. The emphasis is on building a corporate image about maintaining their high quality. There are also considerations underway to promote upcoming brands and products to extend their promotional activities by putting up more billboards, posters, flyers, and banners. They will start internet as their medium from year 2005. These decisions are carried out by the marketing department. Hence, Nestlé Bangladesh is trying to integrate their promotional activities and have an integrated marketing approach.

Nestlé’s Consumer Communication and Relationship

Nestlé is committed to offering consumers high-quality food products that are safe, tasty and affordable. The Nestlé Seal of Guarantee is a symbol of this commitment.

It also believes in maintaining regular contact with the consumers. This applies both to how they present their products and to how they address their consumers’ questions and concerns. When Henri Nestlé prepared his first boxes of infant formula for sale, he put his address on the packages so people would know where to go if they had questions. Today, the Consumer Relationship Panel with the words “Talk to Nestlé” expresses the same commitment.

This is why they have a worldwide Nestlé Consumer Services network devoted to caring for their consumers. Nestlé’s people have expertise in a wide range of areas such as nutrition, food science, food safety and culinary expertise. They provide the prompt, efficient and high quality service that consumers expect from Nestlé.

In addition, the expertise teaches them talk with consumers and above all, to listen. Listening helps them to understand what people want. Nestlé uses the insights gained from relationships with consumers to drive product development.

Nestlé care for Nestlé’s consumers because its success depends on meeting their needs and expectations. Through listening and understanding, it can make products that they will want to use all through their lives.

Although Nestlé is very conscious of its role in communicating responsibility to consumers, Nestlé in Bangladesh does not really perform much consumer communication. As noted their marketing officer, “For Nestlé, our consumers are our distributors”. Nestlé has a separate department designated as “Consumer Relation Department” where the purpose is served. A P.O.-Box had been assigned where consumers can send complaints, mails or any enquiries directly in order to reach Nestlé. This can also be termed as “Post Purchase Service”.  Consumer communication is not much practiced in Bangladesh because at the moment, Nestlé does not have any organized internal database of its consumers. Hence, it can be said that Nestlé hardly takes any initiatives in case of consumer communication.

However, for specific brands, such as Milo, Nestlé Bangladesh has an organized database of 1000 consumers who are the core that is final consumers of Nestlé. Whenever, there are any upcoming new products, Nestlé sends these loyal consumers newsletters, leaflets, free samples and even feedback questionnaires. This is the only consumer communication that Nestlé does in Bangladesh; also consider to be Direct Marketing.  For any other products Nestlé never performs consumer communication.

Retaining old customer or attracting new ones?

For Nestlé, it is a 60-40 ratio. They believe whoever is loyal, Nestlé should do their best to retain their loyalty because if this loyal consumers become disloyal their word-of-

mouth may contaminate other eager consumers. So, Nestlé emphasizes more on retaining loyalty rather than attracting new consumers.

Customer Satisfaction Level

Nestlé regards its consumers as its most valuable asset involvement at all levels start with open communication whether it deals with customer satisfaction or their needs and wants. Nestlé recognizes that its consumers have a sincere and loyal interest in the behavior, beliefs, and actions of the company behind brands in which they place their trust. With it consumers the company would not exist. Nestlé satisfies consumers in many countries and cultures through out the world. According to the Marketing officer Nestlé Bangladesh Ltd, customer satisfaction varies from one aspect to another. In terms of product delivery consumers do not give similar responses. He explained with the simple example, Nescafé for some is refreshment, for others it is relief. At the end of the day, Nestlé consumer are 100% satisfied with the high quality of Nestlé products.

The Nestlé Human Resources PolicyNestlé attempts to recruit relatively young people with a view to long-term employment. Nestle offers an excellent working environment where people, regardless of their levels, have equal opportunities to express their opinions. Management of Nestlé believes in an open door policy and highly discourages bureaucracy in the operational process. The Organization offers an international and multicultural working climate which is conducive to creativity, innovation and the development of personality and which gives new employees responsibility at an early stage of their career, and opportunities of fast development of high performers.

Nestlé is a human company where people are the most important asset and where they can develop their personality and skills to their own and their families’ satisfaction.

Nestlé offers a competitive compensation package and social benefits in line with Nestlé’s commitment to high standards. In addition, the organization offers progressive development through on-going training throughout your career. Training possibilities are available to all staff. Nestlé recently introduced e-learning in Bangladesh, a web-based programme for self development. When joining Nestlé, your training is not over – it is only just the beginning! The human resource goal for the company is to be recognized as the preferred employer in Bangladesh.

SUCCESS IS BUILT ON QUALITYQuality is the foundation of Nestlé’s success. Every day, millions of people all over the world show their confidence in Nestlé by choosing their products. This confidence is based on their quality image and a reputation for high standards that has been built up over many years.

Every product on the shelf, every service and every customer contact helps to shape this image. A Nestlé brand name on a product is a promise to the customer that it is safe to

consume, that it complies with all regulations and that it meets high standards of quality. Customers expect them to keep this promise every time.

Under no circumstances will they compromise on the safety of a product and every effort must be made to avoid hazards to health. Likewise, compliance with all relevant laws and regulations is a must and is not negotiable. People, equipment and instruments are made available to ensure safety and conformity of Nestlé products at all times.

The effort is worth it. Companies with high quality standards make fewer mistakes, waste less time and money and are more productive. They also make higher profits.

Quality is the Nestlé’s most successful product. It is the key to their success, today and tomorrow.

THE CUSTOMER COMES FIRSTNestlé want to win and keep customers: distributors, supermarkets, hotels, shopkeepers and the final consumers. They have very different requirements. Trade customers expect excellent service, correct information and timely delivery. Consumers consider taste, appearance and price when they make their choice. Nestlé wants to understand what customers want and respond to their expectations rapidly and effectively.

It serves various groups of consumers and there is demand for products at different levels of perceived quality and price. All customers, however, expect value for their money – good quality at a reasonable price.

When offering quality to customers it also means environmental quality. Nestlé shares society’s concern for the environment and is committed to environmentally sound business practices throughout the world.

Customers are central to their business and they must always respect their needs and preferences.QUALITY IS A COMPETITIVE ADVANTAGENestle live in a competitive world and Nestlé must never forget that its customers have a choice. If they are not satisfied with a Nestlé product, they will switch to another brand. Its goal, therefore, is to provide superior value in every product category and market sector in which it competes.

The pursuit of highest quality at any price is no guarantee for success, nor is a single-minded cost-cutting approach. Lasting competitive advantage is gained from a balanced search for optimal value to customers, by simultaneous improvement of quality and reduction of cost.

Success can never be taken for granted. Nestlé must watch and learn from its competitors. If they do something better, Nestlé must improve its own performance. Nestlé can achieve competitive advantage through Quality.

QUALITY IS A JOINT EFFORTOperating companies are fully responsible for maintaining agreed quality standards. Not only Production units, but also Marketing, Purchasing, Distribution and Sales have a vital role to play in providing quality to customers. This implies a thorough knowledge of the products and services nestle offer.

Quality units at different levels of the organization provide specific support, promote quality awareness, assume guardianship and audit the system. Quality departments monitor operations against agreed standards and must intervene in case of nonconformity.

Quality policy and principles, the mandatory standards and the recommended tools for implementation are laid down in the Nestlé Quality System which is applicable throughout the group. Further directions are given through instructions, norms and guidelines, often specific to a product.

Nestlé’s business partners, such as raw material producers, packaging suppliers, contract manufacturers and distributors are expected to share Nestlé’s concern for Quality. They too must set up an adequate quality system, so as to meet Nestlé’s requirements consistently.

The quality efforts must be shared by every function and department in the company as well as Nestlé’s business partners.QUALITY IS MADE BY PEOPLEAdequate equipment, procedures and systems are needed to make Quality; so are involved and dedicated people. Each and every Nestlé employee must do his best to provide quality products and services.

Training and teamwork are crucial to the successful implementation of high quality standards. Continuous training ensures that everyone understands his tasks and has the necessary skills to carry them out. Teamwork allows us to achieve results that are greater than the sum of individual efforts.

Nestlé motivate employees by demonstrating management commitment to Quality, by setting challenging goals and by giving them responsibility and recognition. It is through employee involvement that goals and targets can be achieved in the shortest time.

Quality must be a way of life for everyone in the company.QUALITY IS ACTIONQuality is the result of deliberate action. It is the responsibility of senior managers to communicate the quality objectives and to provide the resources necessary for their implementation. It is then up to all employees to make Quality happen throughout the company.

Progress is followed by listening to Nestlé’s customers and by measuring its performance.

Shortcomings and mistakes must be analyzed and corrected. Problems must be anticipated and prevented before they occur. Nestle also must identify and take advantage of opportunities. To stand still is to fall behind. So nestle must strive for continuous improvement in every area. It is through many small improvements as well as through major breakthroughs that Nestlé will achieve excellence.

As Peter Brabeck-Letmathe and Rupert Gasser supposed, “At Nestlé, Quality is our first priority. Let us practice it every day.”[4]

Nestlé: The world food company

    BeveragesCulinary Products

Confectionery

Dairy

Chocolate

Ice Cream

Nutrition  Market audit:The marketing audit is divided in to two parts:

i.            External Audit (Opportunities & Threats)ii.            Internal Audit (Strength & Weakness)(I) External Audit

Scanning the external environment of Nestlé, we tried to find out the opportunities and threats that are pointed out here:

Opportunities:The ability to expand their product line that requires an approach that is compatible with Nestlé’s strengths and that compensates for its weaknesses, e.g. to make certain products available in the market at a relatively lower price so that a larger number of consumers can buy it………products such as Cerelac.

Enhance distribution of their Infant Nutrition Products in a country like Bangladesh where malnutrition already exists, increasing the distribution channels and channel

outlets.Threats:

Few local manufacturers who tend to sale their products at a relatively lower price through various unethical means. For instant, many do not value expiry dates since not much restrictions are practiced in Bangladesh.

High degree of bargaining power of suppliers.

(II) Internal Audit:

Then we tried to analyze the internal situation of Nestlé and we figured out the following strengths and weaknesses:Nestlé Streanths:A portfolio of products which responds to the consumer trend for lighter yet indulgent snackingA unique strategic position which combines powerful local brands with strong global product brandsDedicated core staff who are willing to provide significant labor hours to accomplish targetsCentralized organization that helps in easier coordination of business activities

Nestlé Weaknesses:Far fewer staff than actually required in terms of tasks to be completed.

Significantly less customer support services than is required in terms of the number of customers and the complexity of the services offered.

Except form Milo, they have no post purchase service for other products in Bangladesh.Another Approach toward Strengths & WeaknessesApart from conducting the SWOT analysis, under marketing assessment, a different approach is taken to make an in depth analysis about Nestlé. In this approach, first, some core factors are identified against which the performance or relative strength or weakness of Nestlé can be measured. These factors include:

i.            Marketing Factorsii.            Manufacturing Factorsiii.            Organizational FactorsBut these factors are too broad. So, further some criteria were developed for each factor to be evaluated. Then the relative weaknesses or strengths are measured against each criterion that is summarized here in a tabular format:

P.T.O

Strengths & Weaknesses of Nestlé

 Fundamental Strength MarginalStrength Neutral MarginalWeakness FundamentalWeakness Marketing Factors:Relative MarketReputationPrevious PerformanceCompetitive StanceCustomer LoyaltyDepth of product rangeProduct qualityNew product programDistribution costDealer networkGeographical coverageSales forceAfter sales serviceManufacturing costPricingAdvertisingStructure of competition üü

ü

ü

ü

ü üü

ü üü

ü

ü üü

ü üManufacturing actors:Production facilitiesFlexibilityWorkforceTechnical skillDelivery capabilities  üü

ü

ü ü Organizational Factors:CultureLeadershipManagerial capabilitiesWorkforceFlexibilityAdaptability  ü üü

ü

ü

v Nestlé’s

Commitment to

Environmentally

Sound Business

Practices

Nestlé respects the environment, supports sustainable development and is committed to environmentally sound business practices throughout the world. To fulfill this commitment, Nestlé:

• integrates environmental principles, programmes and practices into each business;

• strives for the continuous improvement of its environmental performance through application of the Nestlé Environmental Management System (NEMS);

• complies with applicable environmental legislation.

Where none exist, Nestlé’s own internal rules are applied; and

• provides appropriate information, communication and training to build internal and external understanding concerning the Company’s environmental commitment.

The Supply Chain

Bringing a food product to the consumer involves a continuous process from farm to table. Integrated measures for preserving the environment, and consequently for optimizing global environmental benefits, are put in place along the supply chain. Nestlé endeavors to apply the following practices to meet its environmental commitment.

Agricultural

Raw Materials

In general, Nestlé is not directly involved in the production of raw materials. Wherever possible, locally available raw materials are used. They are either obtained directly from producers or purchased through trade channels. Nestlé applies the following principles when sourcing raw materials:

all raw materials must meet both legal and internal quality criteria, including limits on possible environmental contaminants;

whenever possible, preference is given to raw materials that are produced by environmentally sound farming methods (e.g. integrated crop management); and

farmers are encouraged to apply sustainable farming methods and, where appropriate, are provided with assistance in crop production and dairy farming. Such assistance includes the provision of recommendations for the conservation of natural resources (soil, water, air, energy, biodiversity) and techniques for reducing environmental impact.

Manufacturing

Manufacturing comprises all processes that are necessary to transform perishable raw materials into safe and convenient food products for consumers. Nestlé strives to achieve optimal performance in its manufacturing activities, including the environmental aspects. As such, the manufacturing practices of the Group:

respect natural resources by emphasizing the efficient use of raw materials, water and energy;

minimize the use of environmentally critical substances;

continuously seek improvement in the efficiency of production facilities; and

Reduce waste generation and emissions as much as possible; consider recycling of waste as a priority and dispose of non-recyclable waste in an environmentally sound manner.

Regular environmental assessments of Nestlé’s manufacturing practices are conducted to:

• evaluate factory performance;

• review factory compliance with applicable legislation and                      Nestlé’s own standards;

Packaging

• fully investigate incidents that could affect the environment and              take relevant measures; and

• compare results with previous targets and set new                                   improvement objectives.

In addition, Nestlé exchanges information on environmental protection technology and practices in order to ensure a wide use of best practices. Nestlé encourages its contract manufacturers to use environmentally sound manufacturing practices.

Packaging serves a major role in our daily lives. It protects food products from spoilage and ensures safety from manufacture through storage, distribution and consumption.

Packaging may also provide tamper-evidence features. It communicates information, including nutritional information and serving instructions, and provides the convenience demanded by today’s consumers. Nestlé is committed to reducing the environmental impact of packaging, without jeopardizing the safety, quality or consumer acceptance of its products. It is Nestlé’s objective to develop safe and wholesome packaged foods using the most efficient and appropriate packaging materials available, while, at the same time, satisfying consumer requirements and expectations. Nestlé seeks packaging solutions that:

result in the lowest possible weight and volume of packages;

take into account new packaging materials and processes that reduce the impact on the environment;

avoid the use of substances that can adversely impact the environment during packaging production and disposal;

decrease packaging waste at all stages, including package manufacturing, utilization and disposal;

increase the use of recycled materials wherever possible; and

Increase the recyclables and compatibility of its packages with existing waste management schemes.

Regular assessments of Nestlé’s packaging are carried out and action plans are implemented. Nestlé supports industrial and governmental efforts to promote integrated waste management that takes into consideration matters such as source reduction, reuse, recycling, composting, energy recovery and landfill. Nestlé encourages suppliers of its packaging materials to adopt sound environmental practices.

Distribution

Marketing

Distribution of products from the factory to the customer involves transport and storage. Efficient management of the distribution system is essential to preserve the safety and quality of Nestlé’s products, to ensure a high level of customer service, and to meet its commitment to environmentally sound business practices.

To this end, Nestlé:

selects appropriate transportation modes, with particular attention given to optimum unit loads (pallets), vehicle capacity utilization, route planning and consolidation with outside partners, scheduling and fuel conservation;

optimizes warehouse and distribution centre locations and environmentally efficient operational systems; and

identifies and implements measures to reduce energy consumption and waste. Nestlé encourages its distribution service providers to use environmentally sound practices.

Marketing is based on the principle of satisfying consumers’ needs. The overall trust of consumers in Nestlé’s brands and products comes from a quality image that has been

continuously strengthened for over 130 years. Nestlé strives to increase this trust through its commitment to environmentally sound business practices.

For this reason, Nestlé:

bases environmental claims in advertising, promotional material, labeling and corporate communications on solid scientific evidence; and

selects materials and printing methods for merchandising materials such as consumer offers, in-store promotions, display materials, leaflets and printed materials in light of environmental considerations.What makes Nestlé Nestlé?

• Inherited attitude

• Appreciation of the individual

• Understanding, knowledge and ideas

• The pull of its brands

• People and relationship drivenFlood relief

Nestlé Bangladesh donates products to support the Prime Minister’s Relief Fund of Bangladesh which helps victims of floods and other natural disasters. The Company also assists with fund-raising efforts for the Flood Relief fund.

Medical support

The Company contributes to the Floating Hospital Project which provides medical assistance for the poorest of the poor people.

Food support

The Company also runs a feeding programme for a school, established for the under-privileged children of Dhaka city slums. Under this programme, food is supplied twice a week for the students.

Sports development programme

Cricket is the most popular sport in Bangladesh. Nestlé Bangladesh has stepped forward together with the Bangladesh Cricket Board (BCB) to develop cricket talent for the future under a special sponsorship programme. Milo will sponsor a series of local cricket development camps and tournaments, to be organized by BCB for the under 13 and under

15 age groups. Through this specific programme, a pool of young talented cricketers will be identified to ultimately represent Bangladesh internationally.[5]

Finally, we would like to conclude by admitting that through extensive perseverance and maximum type commitment. We have succeeded in accomplishing our MKT202 project. Through this project, we have tried to the best of our capabilities present and overview of all the marketing strategies and concepts applied by Nestlé Bangladesh Ltd. to achieve a renowned position in consumer minds. We have also tried our level best to exercise our perceptions to provide recommendation to their concepts and to modify their strategies for better planning of the company

Corporate Governance report 2003Nestlé Management report 2003Nestlé Sustainability ReviewNestlé People Development ReviewCorporate Business PrinciplesNestlé principles of MarketingNestle – Hundred and Twenty-Five Years (1866-1991) by Jean HeerMillion Years of the Food IndustryHenri Nestlé10. The World Food Company

11. The Nestle Management and Leadership Principles

12. Nestle Policy on the Environment